Legal notice from Bajaj finance
1 year ago
I got the phone financed by bajaj finance on january 20, 2022, i also paid emi for january, february but, due to some reason i could not pay in march, Bajaj Finance applied ECS 5 to 6 times When the money got credited in the account, Rs 5000 got deducted from my account, due to bouncing, yet I had paid Bajaj Finance for April EMI, Right now I'm Broke...My business went into loss due to Corona. Now I have been sent a legal notice by Bajaj Finance in the month of July. Tell me what should I do.... I have to pay my rest loan
amount but I need time.
A.Dear client, I am sorry to hear that.
In this case there are few options available to you. Firstly you can initiate a conversation with your financer. In case it doesn't work then :
Refinance your loan
If your problem is one where the EMI is too high, due to either an increase in overall interest rates, or an increase in your personal commitments to yourself, your loved ones, or any other matter personal to you that reduces your bank balance, or a combination of these factors and others, then what the bank will do is restructure your loan.
If you are currently paying Rs. 10,000 per month for N years, and this is too high, the bank might offer you an EMI less than Rs. 10,000 per month, for a little more than N years. So, your EMI goes down, giving you some breathing room and the bank doesn't lose money because it will simply make it up from you over a longer period of time. Everybody wins on some level.
Keep in mind that the payments you now make will eventually cost you more in terms of total money repaid, but if breathing room is what you need, this will provide it. However, the extension in tenure will be small, so the change in your EMIs will also be small.
Also, as a next step, the bank can opt for foreclosure by selling off the collaterals stated when you applied for the loan, by auction, with your co-operation.Â
Refinancing can be done for many situations.Â
It is also the go-to option for people who find that their bank is not reducing floating interest rates in line with other banks. You can approach your bank to reduce rates, or you will shift to a more amenable lender. For credit card debt, you can also opt for balance transfer by shifting your existing debt onto a new card with a 0% interest rate for 6 months and paying off as much as you can within these 6 months.Â
Grace Period
May be the problem is not that you can't pay enough, it is that you can't pay at all. If you are in a position where you feel that within a few months your financial situation will change, you will get a job and be able to start repaying your loan a little bit at a time, perhaps at a lower EMI, then you can approach your bank for deferral of your payments.
The bank will grant relief, giving you a window of opportunity to calmly seek ways to increase your cash flows.Â
Once the window closes, your EMIs will restart (on either the same terms or your new negotiated terms), but will include late payment penalties, known as Delayed Payment Charges. These charges are applicable for payments made after their due date.
In case some of your post-dated cheques (PDCs) have bounced due to insufficient funds, you will also be subject to cheque bounce charges.
Lump Sum Settlements
This is something that for obvious reasons might not be feasible for a home loan, but it can work for a personal loan, credit card debt, or a car loan.
On a case to case basis, banks are sometimes willing to go for one time or lump sum settlements of outstanding dues. They will waive some of the charges or some of the amount and charges, and you can pay the rest as a loan settlement. However, this is detrimental on your credit score.
Getting a loan in the future, if you want one, will become either very difficult or very expensive, or both.Â
In this case there are few options available to you. Firstly you can initiate a conversation with your financer. In case it doesn't work then :
Refinance your loan
If your problem is one where the EMI is too high, due to either an increase in overall interest rates, or an increase in your personal commitments to yourself, your loved ones, or any other matter personal to you that reduces your bank balance, or a combination of these factors and others, then what the bank will do is restructure your loan.
If you are currently paying Rs. 10,000 per month for N years, and this is too high, the bank might offer you an EMI less than Rs. 10,000 per month, for a little more than N years. So, your EMI goes down, giving you some breathing room and the bank doesn't lose money because it will simply make it up from you over a longer period of time. Everybody wins on some level.
Keep in mind that the payments you now make will eventually cost you more in terms of total money repaid, but if breathing room is what you need, this will provide it. However, the extension in tenure will be small, so the change in your EMIs will also be small.
Also, as a next step, the bank can opt for foreclosure by selling off the collaterals stated when you applied for the loan, by auction, with your co-operation.Â
Refinancing can be done for many situations.Â
It is also the go-to option for people who find that their bank is not reducing floating interest rates in line with other banks. You can approach your bank to reduce rates, or you will shift to a more amenable lender. For credit card debt, you can also opt for balance transfer by shifting your existing debt onto a new card with a 0% interest rate for 6 months and paying off as much as you can within these 6 months.Â
Grace Period
May be the problem is not that you can't pay enough, it is that you can't pay at all. If you are in a position where you feel that within a few months your financial situation will change, you will get a job and be able to start repaying your loan a little bit at a time, perhaps at a lower EMI, then you can approach your bank for deferral of your payments.
The bank will grant relief, giving you a window of opportunity to calmly seek ways to increase your cash flows.Â
Once the window closes, your EMIs will restart (on either the same terms or your new negotiated terms), but will include late payment penalties, known as Delayed Payment Charges. These charges are applicable for payments made after their due date.
In case some of your post-dated cheques (PDCs) have bounced due to insufficient funds, you will also be subject to cheque bounce charges.
Lump Sum Settlements
This is something that for obvious reasons might not be feasible for a home loan, but it can work for a personal loan, credit card debt, or a car loan.
On a case to case basis, banks are sometimes willing to go for one time or lump sum settlements of outstanding dues. They will waive some of the charges or some of the amount and charges, and you can pay the rest as a loan settlement. However, this is detrimental on your credit score.
Getting a loan in the future, if you want one, will become either very difficult or very expensive, or both.Â
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